Drivers will have to be offered tens of thousands in electric vehicle discounts if Australia wants to hit its fuel emissions reductions goals.
In an effort to catch up to other developed countries, the federal government has proposed fuel efficiency standards to incentivise the sale and purchase of low or zero-emissions vehicles while phasing out polluting cars.
If passed, the reform will come into effect in 2025.
While the Australian Automobile Association supports fuel efficiency standards, reducing the nation's emissions is not as easy as just implementing these rules.
More than 40 per cent of new passenger cars and about half of new light commercial vehicles, such as vans and pick-up trucks, will have to be electric by 2029, the peak motoring body says in its submission.
Electric and internal combustion engine cars are expected to cost the same prices by 2029.
But if the government wants to encourage Australians to buy at the levels required, it will need to slash the costs of electric vehicles while increasing combustion car costs.
Electric SUVs would have to cost as much as $47,000 less than their fuel guzzling counterparts, while normal passenger cars must be about $31,000 less.
"The analysis suggests the targets will be unlikely to be met without additional consumer and/or producer subsidies, as well as significant enhancements to Australia's EV charging network," the AAA's submission says.
Meanwhile, the Greens have threatened to block the standards.
Though the party supports the reform and wants it to go further, they will not throw their weight behind it unless the Albanese government abandons changes to offshore gas and petroleum laws.
Resources Minister Madeleine King is seeking to reduce what she has described as ambiguity in the rules surrounding consultation that oil and gas projects need to undergo.
But the Greens claim the changes will fast-track gas projects.
Greens leader Adam Bandt slammed Labor as "climate charlatans" who were "spitting" in the faces of people doing the right thing for the environment.
"Instead of strengthening environment laws like they promised, Labor's weakening them," he said.
"Labor approving just one new big gas mine would wipe out all the climate gains from its electric vehicle plan."
The Greens have written to Prime Minister Anthony Albanese saying they will back the government's new vehicle efficiency standards without amendment if the "naked power grab" by Ms King is stopped.
The offshore petroleum and greenhouse gas storage amendment will go before a Senate inquiry on Thursday.
